* Sales slowed at end of 2012-AEB
* 2013 sales seen matching record level in 2012-AEB
* Would-be buyers wary about economic slowdown
By Sonia Elks and Gleb Stolyarov
MOSCOW, Jan 15 Russian car sales have slowed and
are expected to be flat in 2013 after record volumes last year,
industry figures showed, as drivers curb spending with an eye to
economic troubles in Europe and the United States.
The growing middle class, Russia's relatively low level of
car ownership and a large numbers of comparatively old vehicles
to be replaced have spurred sales, making Europe's
second-largest car market a bright spot in a gloomy landscape.
But sales growth slowed at the end of 2012 as economic
uncertainty caused people to think twice before upgrading.
"The next year isn't going to be very easy ... based on the
current conditions and the customer demand," said Joerg
Schreiber, chairman of the Association of European Businesses,
which produces the most timely and comprehensive monthly car
market statistics in Russia.
"Everything depends on the domestic market environment, and
Russia is surrounded by regions where economic development is
quite difficult," Schreiber said on Tuesday.
"So currently, we are forecasting a market on the level of
the market in 2012."
Foreign carmakers have invested heavily in Russia, which AEB
last January predicted could overtake Germany as Europe's
biggest market in 2015-16. Schreiber declined to give a new
forecast on when Russia would overtake Germany.
Last year car sales grew 10.6 percent to 2.935 million, the
AEB said, in line with its previous forecast and setting a new
record, above pre-crisis levels of 2.918 million in 2008.
In 2013, sales are expected to be between 2.8 million units
and 3.1 million units, the AEB said. A median forecast of 2.95
million units would be around flat on the previous year.
Russia's economy has withstood the global slowdown this year
thanks to a spike in government expenditures before President
Vladimir Putin's election in March, while prices for its key
export, oil, have stayed over $100 per barrel..
But GDP growth is far short of pre-crisis expansion rates of
around 7 percent and a recent survey predicted growth of 3.2
percent in 2013, down from an expected 3.6 percent in 2012.
Several industry experts said that one of the main barriers
to high growth in 2013 was psychological, as Russians look to
economic turmoil abroad, despite not having been badly affected.
"They know what's going on in Germany; they know what's
going on in the States, so they are very sensitive to the
potential onset of difficult conditions," Schreiber said.
Alexander Migal, managing director of Chevrolet in
Russia, talked of "psychological issues" alongside "rational
He said the recent surge in sales might not be sustainable
and that growth would likely slow to single figures "for some
period of years."
"I think the real saturation point for the Russian market is
between 6-7 million vehicles per year, so we have a huge
opportunity still in this market," he added.
Marcus Osegowitsch, CEO of Volkswagen's Russian
unit, predicted the first half of 2013 would be depressed, but
the Sochi Olympics next winter could "pick up confidence in the
"We think that the second half of this year and 2014 will be
very strong," he said, predicting that Russia could overtake
Germany's sales of around 3.2 million annually in around 2016.
Foreign manufacturers are investing heavily in Russia.
Renault-Nissan in December finalised a
long-anticipated deal, investing $742 million in a joint venture
which will take control of Russian automaker AvtoVaz.
The partnership will lift production of cars and car kits in
Russia to 800,000 in 2013 - an increase of up to 14.3 percent,
according to a report in Russian newspaper Vedomosti.
Car makers have been reporting double-digit sales rises in
Russia for 2012.
Germany's Volkswagen said on Tuesday it expected Russian
sales in 2012 to have grown grow by 12 percent to 2.75 million
Russian carmaker Sollers this week said that sales
rose 14.5 percent last year.